Index may trade within range
It said trading may continue to be range-bound this week after the market’s mostly sideways and lackluster sessions last week.
STAR/File
Index may trade within range
Iris Gonzales (The Philippine Star) - October 19, 2020 - 12:00am

MANILA, Philippines — Share prices are expected to trade within range this week with immediate support seen at 5,700 with resistance from 6,000 to 6,150 level, according to market research portal 2TradeAsiaResearch.

It said trading may continue to be range-bound this week after the market’s mostly sideways and lackluster sessions last week.

“The local bourse maintained its sideways trade, range-bound between the 5,954 and 5,898 range amid a slew of new headlines, including the change in Philippine Congress leadership,” 2TradeAsia said.

Last week, the PSEi ended 33 points lower at 5,898. The mining and oil sector, together with financials rose by 12.71 percent and 1.55 percent, respectively, while the holdings and services led the decliners with 2.7 percent and 0.94 percent drop, respectively.

“Value turnover weakened to P5.53 billion on average, while net foreign selling eased to P730 million on average from last week’s P1 billion. Meanwhile, gainers topped decliners overall 105 to 88 on average,” 2TradeAsia said.

Moving forward, 2Trade Asia said the market may be more inclined to trade within range for now until after the US elections are finalized by November. This, plus indicators that COVID-19 will remain a major concern by at l east the first half of 2021, partly explain the 26-day consecutive net foreign selling to total $5 billion year to date.

“Further pressures include the timely passage of the 2021 general appropriations bill, and while Congress was able to settle the leadership difference, market participants are often wary of change of hands in politics. In other words, we are not yet out of the perfect storm that is 2020 and for those invested in equities, the safest bets would be holding to safer rafters such as dividend stocks and defensive conglomerates,” it said.

Set against a volatile global macro backdrop, return optimization is key to stretching portfolio returns, according to 2TradeAsia.

“With 2022 as the sweet spot for fundamentals where COVID-19 is expected to no longer be a driving force in the equation plus being an election year for the meantime, the interim should be spent acknowledging dividends and value plays. Immediate support is 5,700,” it said.

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